Is Apple eying a move into the car market?
Andrej SokolowPublished: Feb 25, 2015 4:51 AM | Updated: Feb 25, 2015 4:55 AM
Apple has upturned business models for personal computers, music shopping and mobile phones so far. Is the car market its next target?
Apple has upturned business models for personal computers, music shopping and mobile phones so far. Is the car market its next target?
Such rumours have gained traction since reports in the Wall Street Journal and on the Bloomberg news wire that an Apple team of several hundred is working on an electronic car.
That would put Apple in the same company as internet pioneers-turned-auto industry hopefuls like Tesla and Google, boosting competition in the field for the car of the future.
“The technology companies have come to understand how important a piece the car is to the digital puzzle that is our modern life,” says Thilo Koslowski, a car expert at IT market analyst Gartner. “This is just the beginning. The car industry remains important. But the difference is in the software.”
Apple has hinted at forays into new technologies in the past - think the Apple TV project, which has never materialised despite years of hype - only to disappoint.
Established car companies continue to have a strong position. But the forays by the technology companies are laying the groundwork for the future. “It can all change quickly,” notes Koslowski.
Battery-powered cars by Tesla have demonstrated that there’s nothing stopping newcomers from breaking into the industry.
At first look, an iCar wouldn’t really fit into Apple's existing business model. True, the company has expanded over the decades from personal computers to music players to smartphones to tablets to wristwatches. But all of those have just been computers in various formats.
A car would be an entirely new category of product, meaning the company would have to build up entire new areas of expertise. It would be a significant departure.
While it’s not unfair to say today’s cars are essentially computers on wheels, thanks to the heavy investments in technology made by the car industry in recent decades, there’s still a lot of industry-specific technology that remains the domain of the established companies.
There are also very strict safety regulations that have to be followed before producing a car. Apple would also have to negotiate a new logistics chain. After all, it can ship thousands of iPhones with a single carrier. Cars are bulkier, require service and need some kind of loading station for recharging or swapping batteries.
Additionally, electrically driven cars remain a niche industry, one that is growing less interesting as the oil price continues to remain low.
Put together, it might mean the rumours are just overblown hype. Indeed, Apple has never committed to anything more than its CarPlay platform for linking iPhones to cars.
At the same time, the reports - especially the one in the Wall Street Journal - include a surprisingly rich set of details. They report on plans for a minivan and note that project boss Steve Zadesky heads a team of up to 1,000 from various Apple divisions.
But they also noted that there’s nothing stopping Apple from pulling the plug on the project.
Focused on using contractors
Car manufacturers prefer to build in their own factories, but Apple is reportedly focused on using contractors. The Wall Street Journal reported that an Apple team has already met with Austrian contractor Magna Steyr, a company that offers prototype design as one of its services on its website. Six years ago it displayed the Mila EV concept car.
Austria would also be a good site for Apple to burn through some its cash stockpile of US$178 billion, which it has largely kept outside the United States for tax reasons.
“Apple has a lot of options - and building a car without a partner is not the most interesting, nor the most lucrative,” says Koslowski.
Apple investors would have to brace themselves for the reality that returns in the auto industry tend to be lower than those they have come to expect from the sales of iPhones and other devices.
This is not the first time Apple has been linked to the car industry by the rumour mill. The San Francisco Chronicle reported a year ago that Tesla boss Elon Musk had met with Adrian Perica, responsible for corporate acquisitions at Apple. Apple head Tim Cook was also at the meeting.
Since then, Apple has hired new chief designer Marc Newson, who has designed Ford prototypes in the past.
Indeed, Apple executives have floated the idea themselves. Marketing head Phil Schiller said in court testimony during a patent fight with Samsung in 2012 that the company had mulled the idea of a car after its success with the iPod.
Cook has also pointed out that Apple is open to new ideas, noting in September that the company has multiple projects, but also reserves the right to walk away from them if they don’t work.
- dpa
Such rumours have gained traction since reports in the Wall Street Journal and on the Bloomberg news wire that an Apple team of several hundred is working on an electronic car.
That would put Apple in the same company as internet pioneers-turned-auto industry hopefuls like Tesla and Google, boosting competition in the field for the car of the future.
“The technology companies have come to understand how important a piece the car is to the digital puzzle that is our modern life,” says Thilo Koslowski, a car expert at IT market analyst Gartner. “This is just the beginning. The car industry remains important. But the difference is in the software.”
Apple has hinted at forays into new technologies in the past - think the Apple TV project, which has never materialised despite years of hype - only to disappoint.
Established car companies continue to have a strong position. But the forays by the technology companies are laying the groundwork for the future. “It can all change quickly,” notes Koslowski.
Battery-powered cars by Tesla have demonstrated that there’s nothing stopping newcomers from breaking into the industry.
At first look, an iCar wouldn’t really fit into Apple's existing business model. True, the company has expanded over the decades from personal computers to music players to smartphones to tablets to wristwatches. But all of those have just been computers in various formats.
A car would be an entirely new category of product, meaning the company would have to build up entire new areas of expertise. It would be a significant departure.
While it’s not unfair to say today’s cars are essentially computers on wheels, thanks to the heavy investments in technology made by the car industry in recent decades, there’s still a lot of industry-specific technology that remains the domain of the established companies.
There are also very strict safety regulations that have to be followed before producing a car. Apple would also have to negotiate a new logistics chain. After all, it can ship thousands of iPhones with a single carrier. Cars are bulkier, require service and need some kind of loading station for recharging or swapping batteries.
Additionally, electrically driven cars remain a niche industry, one that is growing less interesting as the oil price continues to remain low.
Put together, it might mean the rumours are just overblown hype. Indeed, Apple has never committed to anything more than its CarPlay platform for linking iPhones to cars.
At the same time, the reports - especially the one in the Wall Street Journal - include a surprisingly rich set of details. They report on plans for a minivan and note that project boss Steve Zadesky heads a team of up to 1,000 from various Apple divisions.
But they also noted that there’s nothing stopping Apple from pulling the plug on the project.
Focused on using contractors
Car manufacturers prefer to build in their own factories, but Apple is reportedly focused on using contractors. The Wall Street Journal reported that an Apple team has already met with Austrian contractor Magna Steyr, a company that offers prototype design as one of its services on its website. Six years ago it displayed the Mila EV concept car.
Austria would also be a good site for Apple to burn through some its cash stockpile of US$178 billion, which it has largely kept outside the United States for tax reasons.
“Apple has a lot of options - and building a car without a partner is not the most interesting, nor the most lucrative,” says Koslowski.
Apple investors would have to brace themselves for the reality that returns in the auto industry tend to be lower than those they have come to expect from the sales of iPhones and other devices.
This is not the first time Apple has been linked to the car industry by the rumour mill. The San Francisco Chronicle reported a year ago that Tesla boss Elon Musk had met with Adrian Perica, responsible for corporate acquisitions at Apple. Apple head Tim Cook was also at the meeting.
Since then, Apple has hired new chief designer Marc Newson, who has designed Ford prototypes in the past.
Indeed, Apple executives have floated the idea themselves. Marketing head Phil Schiller said in court testimony during a patent fight with Samsung in 2012 that the company had mulled the idea of a car after its success with the iPod.
Cook has also pointed out that Apple is open to new ideas, noting in September that the company has multiple projects, but also reserves the right to walk away from them if they don’t work.
- dpa
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